Back of the line, bosses: Phoenix debacle forcing execs to wait for raises, bonuses

Pay increases for Canada’s federal executives have been pushed to the back of the line as the government races to deliver raises and back pay owed to rank-and-file employees through the troubled Phoenix pay system.

The 6,000 executives were all but promised a raise in early June, when Privy Council Clerk Michael Wernick told them they would get a raise that “roughly tracks” the 5.5 per cent raise given to the employees who work for them.

A spokesperson for Treasury Board President Scott Brison gave no indication of when — or if — that raise would be coming, but said a decision “will be communicated in due course.”

Executives also haven’t received their performance pay for last year; departments typically start cutting cheques during the summer. Last year, performance pay was delayed because of the bad optics involved in giving executives bonuses while Phoenix was bungling paycheques and leaving many public servants unpaid.

It’s all led to speculation that the government may be holding off on raises and performance pay for executives until the beleaguered Phoenix system can implement all 27 collective agreements and process the backlog for other pay transactions.

The government isn’t saying that executives aren’t a priority — but with all the problems still plaguing Phoenix, they clearly have been sent to the back of the line.

Public Services and Procurement Canada, the federal paymaster, has acknowledged its priority is to clear the backlog of ‘transactions’ and get raises and back pay to employees by the deadlines imposed by the various collective agreements.

A CBC report suggests the problems with Phoenix are still cropping up — one in two public servants currently have open files on a pay problem. As of early August, 156,035 employees had been waiting 30 days to have their complaints dealt with. About 314,000 federal employees are paid through Phoenix.

PSPC has avoided saying how many people have been affected by Phoenix and has instead talked about the backlog of ‘transactions’, or files. At last count, about 228,000 transactions were sitting in the queue.

As a result, public servants across the country cross their fingers whenever they claim overtime or acting pay, or any other transaction that could change their paycheques. Some have held off on making claims until Phoenix is fixed — which could dump thousands more files into the queue at a later date.

This week, Phoenix delivered the raises and signing bonuses to 80,000 program and administrative employees — the largest bargaining group in government. The deadline for retroactive pay for that group is Nov. 11.

The government doesn’t face the same pressure with executives. They are management, don’t belong to unions and don’t have collective agreements with deadlines for implementing their raises and back pay.

If there is any hold on executive pay, it’s not a formal one. Treasury Board sets spending limits for departments on performance pay that’s based on a percentage of their executive payroll. Departments can divide up their budgets once Treasury Board reviews their plans. In the past, those reports were due by June 30, but this year the deadline was August 30.

That later deadline will push back payments by several months. Treasury Board officials said departments are free to proceed with performance pay payments once those plans are approved.

But there appears to be no rush. PSPC also has acknowledged that processing collective agreements will slow down its drive to eliminate the backlog and could create another bottleneck.

Federal public service executives have been agitated about pay lately; they’ve watched their pay hikes fall at least six per cent behind those for most public servants, while MPs, senators, RCMP officers and rest of the public service have received raises.

There are 6,400 executives in the public service working in five levels, from Ex 1 to Ex 5. Base salaries start at $106,900 and go up to $202,500 for an ADM or Ex-5. There are another 80 deputy ministers and associate deputy ministers who would get the same raises as executives.

The issue of public sector compensation was thrown into the spotlight this week when Rana Sarkar, a former failed Liberal candidate and friend of Prime Minister Trudeau’s senior aide Gerald Butts, was made consul general in San Francisco at a salary higher than the going rate. He will be paid a deputy minister’s salary for a job typically filled by an EX-2.

The government now has wage settlements with 90 per cent of the public service. Executives are among those who have had not raises since 2015. The rest — border guards, prison guards, lawyers, pilot and diplomats — are unionized and their contract talks have hit an impasse.

The Association of Professional Executives of the Public Service of Canada (APEX) said it has not heard anything about a possible raise since Wernick told executives at the APEX symposium that one was coming.

Treasury Board recently settled with most federal unions with a five per cent raise over four years, an increase of 1.25 per cent per year retroactive to 2014. Most employees received a signing bonus or ‘market adjustment’ on top of that.

Executives have received raises totalling two per cent since 2013-14, while unions have negotiated increases during that period worth up to eight per cent — and sometimes more, depending on the contract. MPs have received raises of more than nine per cent during that time.

Such differences have narrowed the pay gap between the most senior unionized employees and entry-level executives — and that’s turning into a significant deterrent when it comes recruiting new executives.